Property can be owned in different ways. Ownership helps determine how it transfers to beneficiaries and whether it is probate or non-probate property.
Examples of probate property (transferred to beneficiaries through a Will/probate) include:
Individually Owned Property
These are assets owned in the name of a single owner with no automatic transfer arrangements, such as the house or land you individually own.
Tenancy in Common Co-Ownership
These assets are owned as tenants-in-common with another, such as the property and land you own together with your sibling, friend or life partner.
There are several types of non-probate property:
Right of Survivorship Property
These are assets owned with another where the surviving joint tenant automatically takes full ownership without going through probate.
Many types of property pass from one owner to another by virtue of a contractual provision, including:
The beneficiary of a life insurance policy receives the policy proceeds at death.
Retirement Accounts with a Designated Beneficiary:
The beneficiary named in an IRA gets the property at the death of the owner by virtue of the beneficiary designation. Governments dictate how (and when) some property is transferred, such as qualified retirement plans, which must pay benefits to a surviving spouse.
Revocable trusts are the final way that property can pass from one individual to another without going through probate. This is why revocable trusts are used as a preferred means of transferring property.
- Do you have individually owned assets? If so, what are they?
- Do you have non-probate property that is owned as Right of Survivorship? If so, what are they?
- What types of Contractual Property do you own?
- How would creating a Revocable Trust to transfer property be beneficial for your estate?